Trump Administration Halts Payments Under Obamacare Program

Report: WH Suspends $10.4B in Obamacare Insurer Payments

Report: WH Suspends $10.4B in Obamacare Insurer Payments

The Centers for Medicare and Medicaid Services, which administers programs under the Affordable Care Act, said the action affects $10.4 billion (7.8 billion pounds) in risk adjustment payments.

The risk adjustment program redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees.

At stake are billions in payments to insurers with sicker customers. The permanent program was meant to reduce the incentive for health insurers to cherry-pick healthy members.

President TrumpDonald John TrumpMcConnell to meet with Trump's Supreme Court pick Tuesday Kavanaugh offers lengthy judicial record ahead of bitter confirmation fight Hundreds protest Kavanaugh's nomination outside Supreme Court MORE canceled key ObamaCare payments a year ago, and also slashed the budget for advertising ObamaCare insurance. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said. Small health plans also have far less capital than more established insurers to comfortably make large risk-adjustment payments.

Democrats say that the cuts are more evidence of Trump officials sabotaging the health law. Critics of the administration's position on the ACA, like Andy Slavitt, former CMS acting administrator under Barack Obama, said that this move will stir chaos in the insurance marketplace. "It's time for the navigator program to evolve, which is why we are announcing a new direction for the program today", said CMS administrator Seema Verma. It's a move that could shake up insurance markets. The Maryland Insurance Administration has a hearing scheduled for July 31.

However, the trade group America's Health Insurance Plans (AHIP) said in a statement that the recent move would lead to uncertainty and increase premiums, putting the burden on small businesses and consumers.

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In its announcement, CMS said the private sector is more cost-effective, so people looking for health coverage should be encouraged to go to insurance agents and brokers (who may receive a commission, unlike navigators).

"This decision comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates". "So it seems like an extreme step to halt this program nationally based on a decision by one district court judge".

"We have to be very cautious". Instead, the insurer referred to a statement from the Blue Cross Blue Shield Association. "It is important to keep in mind that the original risk adjustment payments are budget-neutral such that for some insurers to win, other insurers have to lose".

The payments can be controversial, Dai said.

New Mexico Health Connections and Minuteman Health of MA, two small nonprofit insurers, filed lawsuits in 2016, contending that the Obama administration created an inaccurate formula that unfairly rewarded large insurers.

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